Wells Fargo Has to Pay $575 Million in Settlement with U.S. States

11:42 12/28/2018

According to a statement made by the Iowa Attorney General's office this week, Wells Fargo will have to pay $575 million to settle claims that were made by U.S. states over the bank creating phony accounts and other wrongdoings against customers. It was in 2016 that the bank had agreed to pay $190 million to settle federal claims of creating the phony customer accounts, and improperly referring and charging customers for various financial services products. The settlement announced on Friday, and reported by Reuters, will settle similar claims by attorneys general from all 50 states and the District of Columbia. Wells Fargo stated previously that it had set aside $400 million of the settlement amount and expects to allocate the remaining $175 million by the end of this year. "This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank," Wells Fargo CEO Tim Sloan said in a press release. As part of the settlement, the bank will have to create a customer restitution review program to refund customers who have not gotten compensation from remediation efforts already in place. Wells Fargo will also create a website outlining the existing remediation programs. As per the bank's press release, "Under the terms of the agreement, Wells Fargo will: Pay a total of $575 million to resolve civil claims that the state Attorneys General otherwise might bring arising out of or related to the covered conduct prior to the effective date of the agreement. Maintain designated teams to review and respond to customer inquiries on the covered issues. Create and maintain a website that describes the issues and Wells Fargo’s existing remediation efforts, and identifies contact information for consumers to utilize if they have any questions or concerns about the covered issues. California Attorney General Xavier Becerra said in a statement. “This is an incredible breach of trust that threatens not only the customer who depended on Wells Fargo, but confidence in our banking system." Wells Fargo has already reached settlements with the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, the Los Angeles city attorney and the New York attorney general. The company still faces probes by the U.S. Securities and Exchange Commission, the Department of Justice and the Department of Labor.0

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